Mr. Speaker, one of the ways to help Northwest Territories residents deal with economic conditions in the North is through the tax system. Last year, we changed the Northwest Territories personal income tax system from one of "Tax on Tax" to "Tax on Income". This change gave us more flexibility to design a system that meets our needs. In addition, we increased the maximum Cost of Living Tax Credit for Northwest Territories residents from $645 to $822, an increase of $177. This change was effective for the 2001 tax year and residents will be receiving the increased credit after filing their tax returns in the next few months.
Last May, I established the Minister's Advisory Committee on Personal Income Taxation to provide recommendations on how the tax-on-income system could best serve the residents of the Northwest Territories. The advisory committee studied other provincial and territorial personal income tax regimes and reviewed public submissions. In October, the committee provided a report on the options available to the Government of Northwest Territories, including specific recommendations for seniors, persons with disabilities and low-income residents.
Mr. Speaker, I am pleased to announce that I plan to take the necessary steps to implement the specific recommendations made by the advisory committee, which would lower taxes for all Northwest Territories taxpayers.
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I plan to increase, effective July 1, 2002, the personal credit from $550 to $796, and the married credit from $467 to $796. In 2003, this change will save a single taxpayer $245 and a single income couple $575. These changes increase the level at which a single taxpayer pays no Northwest Territories income tax from $14,447 to $20,650 in 2003. For single earner couples, the income level will increase from $26,076 to $37,071.
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Last summer, the NWT Seniors' Society recommended measures to ease the tax burden on low-income seniors. Effective July 1, 2002, I am proposing to increase the age credit from $268 to $389 as a measure that will specifically benefit senior residents. In addition, Mr. Speaker, I intend to increase the disability credit from $445 to $645, again effective July 1, 2002.
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We are all aware of the high cost of living in the North. Last year's change to the Cost of Living Tax Credit will help address this problem. However, as Members pointed out last year during debate on this measure, further action is needed to provide relief for low-income residents of the Northwest Territories. Mr. Speaker, I am very pleased to announce this government's intention to introduce a minimum Cost of Living Tax Credit for low-income residents. This initiative will ensure a minimum Cost of Living Tax Credit of $250 for an individual over the age of 18 and $500 for a couple. This measure will be effective for the 2002 tax year.
These changes to our tax system will not only benefit seniors, disabled persons and low-income taxpayers but will allow the Northwest Territories to remain competitive with most other provincial jurisdictions. Increasing the tax credit amounts and the minimum Cost of Living Tax Credit will put extra money in the pockets of taxpayers, which in turn puts extra dollars into our communities. For example, the tax measures I have announced today will mean an additional $62,000 on an annual basis in communities the size of Deline and Fort Resolution.
In total, Mr. Speaker, these measures will result in tax savings for Northwest Territories residents of $4.3 million in 2002 and $7.5 million in 2003.
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These tax reductions respond to Northwest Territories residents' concerns about the cost of living in the North, especially for low-income individuals and families. These initiatives also respond to the pressures for the Northwest Territories to remain competitive with other Canadian jurisdictions. I will be introducing the legislation necessary to implement these tax changes later during this session.
Other provinces are lowering both personal income tax and corporate income taxes. We will be monitoring the changes made in other provinces as part of our ongoing efforts to keep the Northwest Territories tax structure comparable to the tax structures in the other provinces and territories.